March 04, 2015 | Grain Hedge Insights | Cody Bills | Views: 153

Grains Pressured by Higher Dollar

The grains are getting pressured this morning by a stronger dollar which is testing new highs.

In the overnight session the grains moved lower with corn down 1 ½ cents, soybeans down 8 ¼ cents and wheat down 5 ½ cents. Minneapolis wheat is down 4 ½ this morning after a 15 cent gain in yesterday’s session. The cash market is firming for spring wheat in Portland which saw basis rise 20 cents yesterday. Spot basis is now at +293 off the May contract which is well above the three year average basis of +201.   


The U.S. Dollar index is pushing higher this morning, closing in on the 95.85 level it traded at back on January 26th. If it closes above that level it is likely that the dollar will resume its upward trend and start another leg higher. Strength in the U.S. dollar is a main reason why U.S. wheat exports have been noncompetitive on the global market.


The Brazilian trucker strike has calmed substantially from last week when over 100 roadblocks were scattered throughout the country.  However, the situation has not resolved itself completely. On Tuesday there were 18 roadblocks that remained and although a key highway to Mato Grosso has been opened up, roadblocks still remain for grain headed for the port of Paranagua.


Yesterday, Argentina grain farmers announced they will suspend grain sales for three days in protest of government policies such as export quotas. Traders see this as a political move to help bring agriculture to the front of attention during this year’s elections. There are no concerns yet that exports will be interrupted, but it will be important to pay attention to any further developments of this strike.  

March 03, 2015 | Grain Hedge Insights | Cody Bills | Views: 270
March 03, 2015 | Grain Hedge Insights | Cody Bills | Views: 130

Grains Mixed After Monday Selling

The grains are mixed after Monday selling with Informa's latest crop report expected out at 10:30 AM this morning.

The grains are mixed this morning with corn up 1 ¼ cents, soybeans down 3 ¾ cents and wheat in Chicago down 2 ½ cents. Traders should keep an eye on the Informa Economics latest crop estimates scheduled for release at 10:30 AM this morning. Also on the horizon is the USDA Supply and Demand report to be released on the 10th and the NOPA crush figures on the 16th.


Yesterday, export inspections showed that corn beat analyst expectations by recording 1.2 million metric tons inspected for export compared to expectations which ranged from 750,000 and 900,000 MT. Wheat reported 450,093 metric tons inspected for export which was on the high side of analyst expectations and soybeans recorded 635,164 MT which disappointed analysts who were expecting between 750,000 and 950,000 MT.


A recent crop condition report on Monday showed that the western HRW regions of Oklahoma, Nebraska, Texas and Colorado have improved their crop conditions ratings due to less than expected winterkill during February. However, Kansas wheat conditions have slipped due to harsh conditions and freezing temperatures throughout February. 

March 02, 2015 | Cody Bills | Views: 225
March 02, 2015 | Grain Hedge Insights | Cody Bills | Views: 308

Police Crack Down on Brazil Roadblocks

The police handed out fines and cleared out a number of roadblocks helping restore traffic flow to congested areas of the country.

In the overnight session the grains traded mixed with corn down 1 cent, soybeans up 2 ¼ cents and wheat up 2 cents going into the morning pause in trade. The Chicago wheat market seems to have held support off $4.96 last Thursday which was the previous low back on February 2nd.


Over the weekend the Brazil police enforced the fines announced by the justice minister on Friday. The Police arrested protesters and broke up road blocks bringing the total number of road blockages down from 88 on Thursday to 12 partial roadblocks nationwide. Protest leaders stated that the government has still not addressed the striker’s issues. The Brazilian government will increase the police presence on the highways to ensure freight lanes are kept open.


The Midwest is expecting to receive more wintery weather this week with below zero temperatures expected by the end of the week and between two to eight inches of snow is expected in the northern Delta. Due to the accumulated snow cover, there is a low concern for winterkill freezing areas.  

February 27, 2015 | Cody Bills | Views: 185

Weekly Wrap Up

Cody and Kevin talk weekly basis and give an update on the trucker strikes in South America.

February 27, 2015 | Grain Hedge Insights | Cody Bills | Views: 195

Weekly Cash Comments

Cash Commentary for week of February 27th

Corn basis saw modest growth this week advancing 2 cents a bushel on average across the country, but bean basis was unchanged thanks to higher futures and better farmer selling.


In corn, basis levels were up largely driven by strength at ethanol plants in the Western Cornbelt. On average, ethanol plants posted a 3-cent gains but in the Western Cornbelt plants were up 5 to 10 cents a bushel in some cases. This week’s ethanol production was off 17,000 barrels per day from the previous week, but year-to-date production is still well ahead of last year’s pace. At the Gulf, export basis gained 2 cents a bushel but river terminals on average were up slightly less than that. Southern stretches of the Mississippi river and the Ohio River saw corn basis strength this week.


For beans, average basis levels were flat across the country, but soy crushing plants as a group were off 2 cents a bushel. Deliveries appeared to pick up this week with soybean futures shooting higher early in the week thanks to the threat of a Brazilian trucker strike. Also, bad weather in the US eastern Cornbelt kept plants in Indiana and Ohio bidding higher for beans as farm movement slowed, while river terminals along the Ohio River encouraged farmers to deliver beans over corn to their facilities. On average, river terminal basis levels were unchanged for the week in spite of a 4-cent advance at the Gulf.

February 27, 2015 | Grain Hedge Insights | Cody Bills | Views: 181

Grains Higher Going into Friday

The grains are trading higher going into the Friday session as Brazil logistics concerns continues to stir up short covering on Soybeans.

In the overnight the grains traded higher with corn up ¼ of a cent, soybeans up 3 ½ cents and wheat up 6 ¾ cents going into this morning’s pause. Wheat seems to be bouncing higher this morning after holding a major support level of $4.92 ¼ which was the low back on February 2nd. Today is first notice day for March grain contracts.


The trucker strike continues in Brazil even after the Government offered truckers a year of free financing for vehicles from the state development bank, an offer to keep diesel prices unchanged for six months and to help truckers work out a framework for setting freight rates. This offer by the government resulted in some truckers ending their strike and clearing off the roadside, but many roads throughout Brazil are still blocked. Yesterday, in an attempt to break the trucker strike, the state Justice Minister said that the government would impose fines of about $1,700-$3,400 per hour on trucks who have blocked roadways. Despite the threat of fines truckers continue to block traffic throughout Brazil.


Weather forecasts in Brazil continue to show moisture in the forecast which has been interrupting the Safrinha corn planting pace. More rain is expected in the northern part of Brazil for the rest of the week and throughout the 6-15 day outlook. There are some slight concerns that the delays in planting could lead to additional acreage and yield loss throughout Moto Grosso.   


Yesterday Brazil’s Agro consultant released their latest forecast of 14/15 Brazilian soybean production pegging the crop at 94.7 million metric tons compared the USDA’s forecast in February of 94.5 MMT.

February 26, 2015 | Grain Hedge Insights | Cody Bills | Views: 345
February 26, 2015 | Grain Hedge Insights | Cody Bills | Views: 451

Export sales provide little support to the markets

Export sales were on the lower end of expectations this morning with corn missing expectations by a couple hundred thousand metric tons.

In the overnight session the grains traded mixed with corn and soybeans up 2 ¼ each and wheat trading 1 ¼ cent higher going into the morning pause in trade. Today is the last day to get out of any March grain contracts with first notice day Friday the 27th.


Yesterday at 11 AM CST trucker strike representatives met with the Brazil government to seek a resolution to the multi week long strike that has clogged roadways in Brazil. Following the meeting, Brazil minister says that the Government is not open to altering fuel tax to appease the striking truckers. However, the government followed that announcement by stating that the truckers are showing flexibility and that they expect a resolution will be reached soon.


Exports sales for corn were weaker than expected, while wheat and soybeans reported sales on the low side of analyst expectations. For the week ending February 19th corn export sales totaled to 715,800 MT which was down 23 percent from last week. Analysts were expecting to see corn sales between 900,000 and 1,100,000 metric tons. Soybean export sales were on the low side of expectations booking 459,200 MT compared to expectations between 450,000-650,000 metric tons. Soybean sales are still well ahead of the pace needed to meet USDA expectations. Wheat sales were reported 328,300 metric tons of sales, within the analyst expectations and up 23 percent from the previous week.


                                        Expected                   Actual

Corn                          900,000-1,100,000            715,800

Soybeans                       450,000-650,000            459,000

Wheat                          200,000-400,000            328,300


This morning the International Grains Council forecast the world wheat crop to increase 2 million metric tons to 719 MMT for the 14/15 marketing year. The IGC forecast a decline for the 15/16 marketing year to 705 MMT. 

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